The election is now over and Sen. Barack Obama has assumed the role of the President Elect. The country is now waiting to see how many of his promises he keeps. Both candidates made a lot of ridiculous and—dare I say--ostentatious proposals throughout the election, but it is our job as American citizens to both critique and monitor how our elected officials follow through with said proposals. As such I have put together the following list of Obama’s most ostentatious tax promises that are most unlikely to become reality.
1. To limit tax increases to only those making over $250,000 a year.
Reality: When Obama states no tax increases, he is not including his plans to let the Bush tax cuts expire. Although letting a tax increase continue is not necessarily a "tax increase" it makes no difference to taxpayers expecting a cut. By saying he promises to only increase taxes for those making a quarter million, Obama seemed to be trying to gain votes with misleading information; another red flag of a campaign promise with the potential to flop.
2. Not to raise taxes on 95% of working Americans.
Reality: In addition to selectively expiring the Bush tax cuts, Obama has proposed to increase the cap on income payroll taxes. These tax increases could be huge for those making between $97,000 and $250,000, and the perfect candidate for this bracket is the small business owner. Therefore Obama is likely to raise taxes on much more than 5% of Americans.
3. To increase the capital gains tax rate from 15% to high 20%.
Reality: We all appreciate Obama’s efforts to make taxes fairer, but raising capital gains is not the way to do it. While 1 percent or less of Americans make over $250,000, nearly half of all Americans hold stock one way or another. Remember, the stocks in IRAs and 401(k)’s have capital gains taxes and many Americans use these to plan for retirement. That being said, raising the capital gains tax rate clearly does not target only the "fat cats" of our country.
4. To raise taxes on businesses and oil companies.
Reality: When corporate taxes go up, so do prices. This goes for oil, groceries, and motor vehicles alike. By drastically raising business taxes all Obama would be doing is passing our taxes through another outlet and right back to us. In addition, Obama has had some curious views on what constitutes as “big business” and what constitutes as “small business”, making small business owners weary of his tax policies.
5. To reform the IRS and make the way American’s file their tax returns easier.
Reality: Very early in Obama’s campaign he announced a desire to drastically simplify the way Americans file their tax returns. He even claimed that under his simplified tax code would allow anyone to complete his or her taxes in minutes as long as they take the standard deduction and have a bank account. Part of his plan includes using pre-filled out tax forms. Although his plan is more realistic then completely eliminating the IRS, it still has tribulations. In a perfect world, people could easily file their returns, as the IRS would send pre-filled tax returns. However, we do not live in a perfect world. Implementing a plan to simplify tax returns could create large problems for the IRS. Additionally, this program would open the floodgates for large-scale identity theft problems. Information contained in a taxpayers return is highly sensitive and we all know standard mail is not the most secure way to send something.
6. To eliminate income taxes on low-income senior citizens.
Reality: Although many claimed it was only an attempt to get the attention of the “senior voters” and the AARP, Obama promised massive amounts of tax relief to millions of seniors struggling to make ends meet. He planned to completely eliminate federal taxes on seniors making less then $50,000.00 per year, which would generate about $7 million dollars in total relief for seniors. However, I find it very unlikely that the country would get behind a tax break aimed specifically at one age group.
